The U.S. Coast Guard announced yesterday that it has terminated the Deepwater Fast Response Cutter-B acquisition currently with the Lockheed Martin and Northrop Grumman Integrated Coast Guard Systems joint venture. It has reassigned the project to the Coast Guard's Acquisition Directorate.

Admiral Thad Allen, commandant of the Coast Guard said the move pertains only to the acquisition of patrol boats and does not impact ongoing negotiations with ICGS for other work to be done in the second performance period of the Deepwater contract, beginning June 2007.

Meantime, Senator John Kerry (D. Mass) today introduced legislation that would prevent the Coast Guard from re-signing the current Deepwater program contract with Lockheed Martin and Northrop Grumman. Kerry's bill requires the Coast Guard re-open the contract and hold a competitive bidding process for the remaining aspects of the program. Last month, Kerry called for the Coast Guard to drop the current contract when it comes up in June.

The Coast Guard Acquisition Directorate expects to release the Request for Proposal for the 12 FRC-B patrol boats in May 2007. The RFP will be for a fixed-price contract based on an existing, in-service, proven patrol boat design requiring only minimal modifications to meet basic requirements.

The so-called "parent craft" acquisition strategy was chosen for the FRC-B when design work on the FRC-A was suspended in early 2006 due to technical risk.

The Fast Response Cutter is the smallest of the three major classes of cutters included in the Deepwater plan and will be able to deploy independently to conduct missions such as ports, waterways and coastal security, fishery patrols, drug and illegal migrant law enforcement, search and rescue, and national-defense operations. Advancing the design and construction of this new patrol boat is one of the Coast Guard's top near-term priorities.

The total notional requirement for FRC's is 58. That is 46 more than the dozen initially covered by the FRC-B program. This raises several questions about what happens now to the original FRC--now designated FRC-A. Design work on that program was "temporarily suspended" in February 2006.

Kerry legislation

In introducing his Deepwater Accountability Act today, Senator John Kerry (D-Mass.) called the decision to cancel a part of the Lockheed/Grumman contact "a good first step."

"Now, Congress needs to get serious about oversight to make sure taxpayer dollars are protected in the Deepwater program going forward," he added.

Kerry's legislation, The Deepwater Accountability Act, is intended to increase oversight of the program, while providing the Coast Guard with the flexibility it needs to get the Deepwater program fully implemented.

Kerry's Deepwater Accountability Act:

Requires the Coast Guard to solicit new contracts for the remaining assets of the Deepwater Program under the open competition requirements of the Federal Acquisition Regulation (FAR).

Requires the Coast Guard to oversee all management decisions under the new contracts, so as to have full say over how taxpayer dollars are spent.

Allows the Coast Guard to continue to work with Lockheed/Grumman on any incomplete asset if the Secretary of Homeland Security determines that bidding it out would compromise immediate national security needs or cost more money. If this occurs, the Coast Guard must submit a report to Congress on the status of the project every 180 days.

Requires the Department of Homeland Security to submit a report to Congress within 30 days of enactment, detailing which assets the Coast Guard needs to finish with Lockheed/Grumman and which assets can be competitively bid.

Requires the DHS Inspector General to issue a report to Congress within 180 days describing any decisions that resulted in cost overruns, whether any decisions violated the terms of the contract, and which party is responsible for covering any cost overruns.